Blue Mass Group

Reality-based commentary on politics.

Democrats want to raise taxes going into a recession.

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Charlie Rangel – SR Democrat on Ways and Means has a new Tax plan. He  wants to add a  4.6% surcharge after the increase to 39.6% from the expiration of the Bush cuts.
  Therefore, the top rate is 44%. 

Bill Clinton’s top rate was 39.6%

He wants to add another 3%  additional on Medicare and we get to 47%. 

19% drop in take home pay

If we are going into recession hiking taxes is not a great idea

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  1. Lets continue to not pay the bills?
    What is the dollar trading at today?
    As a debt obligation, upon careful examination of the books of corporation USA, would you be interested in investing in the US dollar?
    I’m all for not raising taxes. I would prefer thay be abolished.
    But if there is a recesion looming, it will not be caused by taxes, it will be caused by budget mismanagement leading to runaway inflation as a direct result of the dollars implosion.
    Ever wonder why inflation data always exludes food and energy? I dont think I need to drum on the obvious, you can figure it out if you take the time.
    The point is something has to give, cut spending or raise taxes, one or the other, but doing neither is the worst of the options IMO

  2. Do you honestly believe that the top 1% of Americans are going to spend us out of a recession? I don’t think so.

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    You also won’t find very many Republicans who are willing to admit that we are going into recession so you won’t find to many of them making this particular argument.

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    In any case, we have to pay our bills somehow. How do you propose we do it? The national debt continues to grow unabated and the only thing that is going to bring it down is for us to spend less than we bring in. Spending is not going away anytime soon, since both parties seem to be addicted to it, so what else is there to do but raise taxes?

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  3. This info should really be in the OP. 

    Democrat vows equity in tax plan

    The overhaul would make top earners pay more and give millions a break. Republicans see 'mother of all tax hikes.'

      By Jonathan Peterson and Noam N. Levey  Los Angeles Times Staff Writers    October 26, 2007 WASHINGTON — The lead tax architect in Congress on Thursday unveiled a sweeping package of cuts and increases, which could become the blueprint for the Democrats' initiative to overhaul the tax code and restore what party members view as fairness in the U.S. economy. The planwould reverse the trend of the Bush administration by boosting taxes on some of the nation's wealthiest people, including partners in private equity firms, the new kings of Wall Street. It would provide tax relief for more than 90 million households, proponents said, most of them with less than $100,000 in annual income. It would also eliminate the alternative minimum tax, a measure designed to ensure that the rich paid at least some taxes, but which threatens millions of families — many middle class — with a surprise tax hike this year. And in at least one departure from Democrat stereotypes, it would reduce the corporate income tax, a measure also recommended by the White House, and extend a range of mostly small tax breaks sought by businesses. “We have attempted to restore equity and fairness to the system,” said Rep. Charles B. Rangel (D-N.Y.), chairman of the House Ways and Means Committee, whose plan would pay for tax relief by wiping away various provisions enjoyed by business and investment firms.

    …

     According to House staffers, more than 90 million taxpayers would have some relief, including an estimated 23 million who would not be forced to pay the alternative minimum tax. Fewer than 2 million Americans would face a tax hike, predominantly those earning more than half a million dollars a year. The elimination of the the alternative minimum tax, or AMT, is perhaps the most dramatic facet of the plan. The AMT was imposed in 1969 to make sure that the wealthiest Americans paid at least some tax, but it has turned into a tax increase for a growing number of taxpayers because it is not indexed for inflation. Congress has attempted to save the middle class from falling under the AMT by passing a series of temporary fixes that raised AMT thresholds and exempted popular breaks, such as the child tax credit. This year, all those temporary fixes are slated to expire. That would potentially make anyone earning over $75,000 vulnerable. Rangel's measure would also impose a surcharge on higher-income people. The most affluent taxpayers, earning at least $200,000 in adjusted gross income for couples filing joint returns, would face a new surcharge of 4%, moving up to 4.6% for those earning over $500,000.

    …

      Rangel on Thursday proposed to pay for a short-term AMT fix with $48 billion in tax increases affecting hedge fund managers whose income is sheltered in offshore accounts and managers of private equity funds who pay the 15% tax on capital gains, instead of the higher income tax rate.

     http://www.latimes.c…

     

    • Of course nothing's perfect, but as far as tax overhauls go this doesn't look so bad.

       

       

      Rangel's $1 trillion bill includes the following:

      CORPORATE TAX RATE

      Cuts top corporate marginal tax rate to 30.5 percent from 35 percent.

      PRIVATE EQUITY CARRIED INTEREST

      Imposes income tax rate of up to 35 percent on “carried interest” gains of managers of private equity firms that buy and sell companies, as well as other investment funds, when “carried interest does not reflect a reasonable return on invested capital.” Carried interest profits are now taxed at the 15 percent capital gains rate.

      HEDGE FUND TAX HAVENS

      Prevents hedge fund managers from deferring taxes on their pay by sheltering it in offshore tax havens; requires accounting for compensation as it accrues.

      LIFO ACCOUNTING

      Repeals last-in, first-out (LIFO) accounting method with any income resulting from the change spread over eight years.

      DOMESTIC PRODUCTION DEDUCTION

      Eliminates 3.15 percent corporate tax deduction for domestic manufacturing income.

      FOREIGN INCOME REPATRIATION

      Requires companies that defer paying taxes on income earned through overseas units by sheltering it abroad to also defer related tax deductions, encouraging these companies to repatriate their foreign income and reducing incentives to ship jobs overseas.

      TAX-EXEMPT HEDGE FUND INVESTMENTS

      Allows pension plans, universities and other tax-exempt investors to invest in hedge funds without incurring unrelated business income tax (UBIT), improving tax-exempt investment fund returns and eliminating incentive for such investments to go offshore.

      COST-BASIS BROKER REPORTING

      Requires cost-basis reporting by brokers for transactions in stocks, bonds, commodities and other securities; would apply to stock acquired after January 1, 2009, and for all other securities, after January 1, 2011.

      R&D TAX CREDIT

      Extends for one year the corporate tax credit for research and development.

      MORTGAGE INSURANCE

      Extends for one year the deductibility of mortgage insurance payments.

      RESTAURANT IMPROVEMENTS

      Extends for one year a tax rule allowing restaurants and other businesses to recover the costs of certain improvements over 15 years instead of 39 years.

      PUERTO RICAN PRODUCTION

      Extends for one year the deductibility by businesses of income attributable to production activities in Puerto Rico.

      http://www.reuters.c…

       

      • I thought I was replying to standard neocon spewing. I was unaware that such a proposal had actualy been inked. Of course you realize that this will go nowhere đŸ™‚
        Any idea if its revenue nuetral?

        • You can see in that glut of info upthread that the tax relief for the working class is offset with revenue gains based on tightening loopholes for the ultra wealthy.

          • It is just a reversal of this:

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            http://www.demos.org…

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            I would expect to find little support from either side unless it is to be used for electioneering purpose only ..
            K street is just a satelite office for Wall street.

            • before I learned that Charlie Rangel is actually a proponent (or at least he pays lip service to) Free Trade.  (capitalized to emphasize the concept as an abstract philosophical extension of capitalism rather than the actual trade policies that comprise free trade in practice)

              Rangel is, predictably, a fairly corporatized politician.  At least as much as your typical Clinton.

              This bill just might have a chance.  The question is:  Will it get ammended to death with poison pills like repeal of the estate tax?  I suspect that's exactly what the conservatives intend to do. 

              • PRIVATE EQUITY CARRIED INTEREST

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                Imposes income tax rate of up to 35 percent on “carried interest” gains of managers of private equity firms that buy and sell companies, as well as other investment funds, when “carried interest does not reflect a reasonable return on invested capital.” Carried interest profits are now taxed at the 15 percent capital gains rate.

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                This is the pot of gold and it is a no fly zone. When it vanishes the whole thing falls apart IMO.

                • This bill could gain some traction if it can garner some vocal public support.  I think the most important thing is to recognize the bill for what it is and what it is not.  It is NOT an across the board tax hike like the conservative message machine would have everyone believe, it is not a tax hike on regular working joe's.  It IS tax relief for the vast majority of working class people.

                  But yes, you've keyed in on one of the main sources of revenue to facilitate this rebalance. 

                   

  4. He's the CHAIR.

    Senior Ranking Member is the status bestowed to the top committee member of the MINORITY party.  For the MAJORITY party, the designation is Chairman. 

    …just keeping this post reality-based. 

  5. …your counter-proposal would be to reduce federal spending. 

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    Such as in eliminating the funding for the war on Iraq?  That would reduce the federal deficit considerably.  Like, by about US$200b/yr.

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    Such as in eliminating agricultural subsidies.  That would reduce the federal deficit by about US$50b/yr.

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    I could go on and on.  Just exactly what federal spending do you want reduced?

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